[RivieraKid]

Exactly, wage fixing is fine in a free market, that directly follows from the definition of an unregulated market, every market participator is free to do any market decision they want.

This is a nice example why free markets are not optimal, zero regulation is not the best amount of regulation.

[WalterBright]

Regulation is often used as a tool to fix prices, as price fixing agreements in a free market tend to be unstable and unenforceable.

[RivieraKid]

Both of these statements are true but I don't get your point. Neither do I get why they're connected with "as", I don't see the implication.

[icebraining]

Is there empirical evidence of that?

[WalterBright]

A few cases come to mind.

1. The government froze wages in WW2, and companies got around that by offering free health insurance.

2. Unions often got the government to force workers to join the union, because otherwise workers would undercut the union.

3. There were numerous attempts to fix wages of black laborers artificially low after the Civil War, they would constantly fall apart because individual farmers would pay more under the table to attract better workers. See "The Strange Career of Jim Crow".

4. Government "price supports" are there because of the consistent failure of farmers to voluntarily comply with price fixing agreements.

[WalterBright]

I forgot to add - anti-dumping, unfair competition, and predatory pricing laws. Those are just a way to use regulation to fix prices because voluntary price fixing fails.

[adventured]

Yes, there is a large amount of recorded history of attempted price fixing from 1830 > 1920x or so, and the results of such efforts. Given it wasn't illegal for the most part, companies & individuals didn't work very hard to hide their schemes from the history books (although sometimes from competitors). The efforts tended to be constantly in flux, subject to rapid shifts in loyalty and dedication, and the agreements were typically without any formal contractual requirement. There are numerous excellent economic accounts of the 19th century US market that covers this, and many good books for companies and persons that do so as well (eg covering the Pennsylvania Railroad, the Vanderbilts, Rockefeller, JP Morgan, Carnegie, and on it goes).

[nickik]

While I at the moment can not give all the referneces. One thing we know is true, is that there is a far greater amount of monopoly or cartel created by goverment then by market.

If you look long enougth you can find some cartels and monopolys that are stable for some time. Even when most of these where not able to really raise prices where far.

If you look at goverment enforcment of cartel and monopolys you will find a unbelivable amount. If you add tarrifs to that (ie blocking import of steel from japan). You will find that regulation far more often helps big buissness.

This is what people dont understand about free marketers. I do not belive that it is impossible for goverment action to imporove short run and maybe even long run conditions, but I belive it is far more like that this power is misused.

So yes you can go out of your way and figure out some asymetiric cost for whatever groupe you like. You can then go on and argue that in order to rebalance this the state needs to do 'something' (perfeclty show in the thread by all the people point out that employes can easly switch jobs and therefore there wage is below equillibrum). Stigliz for the win. This all works out great in theory but runs flat against a wall in practice. When it does run against a wall its of course just because of 'republicans' blocking all sencible policy or whatever.

So this is the reason for free market views, it is not as some people seam to belive that 'the free market is always perfect'.

[Romoku]

One of the general misunderstandings of libertarianism is "since you're pro-market you must be pro-business." Free market libertarians are generally business/labor neutral as libertarianism simply provides the framework for the players. A libertarian would view a business/labor union that relies on government cooperation as a failure.

[smsm42]

If you have a pre-determined goal in mind - like maximizing your revenue - of course free market is not optimal for you! For you, the optimal market would be one in which the rules are skewed in your favor. In general, free market can not be optimal if you have predetermined outcome in mind as "optimal", because if the outcome were predetermined, the market of course would not be free!

The question to ask here is why do you think your preferred outcome is better than mine and what gives you right to force it on me.

[icebraining]

This collusion happened in a regulated market, though.

[nicolasp]

The market being regulated doesn't necessarily prevent collusion from happening, but makes it illegal when it does happen.

[icebraining]

The point is that we can't take a market with N regulations, see what happens with (N-1) regulations being followed, and then say "see, that's what would happen without any regulations!"

Kill the regulations helping the capitalists, not just the ones giving a hand to the worker, and then we can talk.

[adventured]

The 19th century in the US is probably the largest data set when it comes to extremely low regulation markets. Hong Kong is a more recent example. The point being, there is a lot of actual real world data on each side of the fence.

[icebraining]

Well, it depends on what you consider regulation. If you take a broader view, like Benjamin Tucker did, you'll see they were in fact very regulated.

[nickik]

Well let me give you the simplest market argument I know. Look at corrulation between economic freedom and economic size and growth.

http://www.freetheworld.com/2013/EFW2013-complete.pdf (Page 22)

[lmm]

> The point is that we can't take a market with N regulations, see what happens with (N-1) regulations being followed, and then say "see, that's what would happen without any regulations!"

That seems like the sort of evidence that's actually useful when making policy decisions about whether we should increase or decrease regulation. Abolishing all regulations is not practical, so what political theorists think would happen in a complete absence of regulation is irrelevant to any real-world issues.

[icebraining]

It's only relevant when making policy decisions about that particular rule. Regulations aren't commodities, and the fact that eliminating a certain regulation would destabilize the system is no evidence that removing any other regulation would do the same.

But in any case, if you think what would happen by abolishing all regulation is irrelevant to the real world, then you should be replying to RivieraKid, who was the one drawing such irrelevant (and, in my opinion, unsupported) conclusions.

[RivieraKid]

That's true, but I'm not sure I get the point.

[icebraining]

I stated it in the other thread: https://news.ycombinator.com/item?id=7176384